Project Costing and Reporting Overhaul

REQUIREMENTS

A large, 100 year old and well respected design firm with multinational customers like Boeing, Segway Powersports and numerous airlines uses NetSuite to manage large and lengthy customer Projects, to which billing and expenses are associated. Project managers must have accurate project reporting for estimated total labor and expenses, actual expenses and labor billed, and those incurred but pending billing, including as yet change orders. Invoicing for Labor and Expenses is carried out monthly, using NetSuite’s Charge-Based Billing.

In addition, bi-weekly executive meetings include reviewing snapshots of each project’s statuses and estimates to completion, while comparing to previous bi-weekly snapshots. This process is managed entirely outside of NetSuite.

ISSUES

A number of challenges in NetSuite caused unidentifiable and often unresolveable report visibility inaccuracies, particularly with respect to costs, required far too much manual work to correct those inaccuracies identified, and negatively impacted billing accuracy.

• Labor Costing

  • Hundreds of full and part-time salaried and hourly employees record billable project time and are often paid different rates for the same project roles, particularly with overtime. Resources are assigned but may change roles after estimates are made and projects begun. NetSuite’s project labor costing module lacks the required flexibility to account for these variances, has inadequate privacy control, and does not maintain a record of resources’ roles and labor costs as changes are made, nor does it provide the lock down and audit trail of historical roles and rates on transactional data as otherwise expected throughout NetSuite, therefore changes erroneously impact legacy reporting.

  • Utilization Reports in NetSuite are not able to differentiate time by salaried and hourly employee’s time, so results are significantly skewed high, and of little use for project managers as well as accountants recording actual COGS.

  • When a project employee changes roles, each of his/her project managers must manually update billing and costing rates on dozens of tasks assignments, a slow and error prone process that frequent cause billing and accounting errors.

  • NetSuite API for Labor Charges and Time Entries are very difficult to work with, and often cannot support an otherwise obvious solution design.

• Expenses Costing: Charge Rule Markups are applied as expenses are billed, but are not reflected on reports or transaction lines prior to billing, a key requirement.

• Project Labor and Expenses Cost and Revenue Reporting: Given requirements and several NetSuite API challenges, source from a variety of transaction types and cannot be supported by a single UI view due to fatal performance roadblocks.

• Change Order Management/Visibility: With Charge-Based Billing, there is no native solution for recording change orders that directly impact estimated labor and expenses, so these are managed manually, as is the multi-step approval process.

• Project Status Snapshots: NetSuite does not have a solution even if using native frameworks, due to fatal search/report performance issues.

SOLUTIONS

A comprehensive suite of architectural, reporting and automation provides fully auditable and accurate costing and billing data for the first time, with reports that provide all requirements in a single real-time user interface within NetSuite, and that removes countless hours of manual data entry. 

• Labor

  • Costing: A new framework was designed to allow specific managers to discreetly define and report standardized loaded labor costs by project role without losing desired privacy. And, critical to accuracy and confidence, modest automations fully apply and lock-down an auditable historical record for each associated human resource and each transaction and source data, including several prior years of legacy data for every open project.

  • Utilization: Modest custom configurations are updated by an automation to cap reporting of salaried employees’ utilization hours based on required HR parameters. 

  • Task Assignments: An automation allows HR to update all an employee’s open task assignments with new billing rates as billing rate cards are changed, with a single button. Changes to project costing roles are automatically sourced to forthcoming time entries and require no human intervention.

• Real-Time Project Financials Visibility: Custom sourced and calculated cost and revenue values, including those awaiting billing and invoicing, are updated on projects and tasks several times daily, providing real-time visibility to project managers and executives alike.

• Project and Task Status Snapshots: New, low-footprint records can be triggered anytime, and store all of a project’s financial and time values. Critical for managing and reporting the entire life-cycle of project performance from a month-month basis.

• A Single-UI Dynamic Report now provides real-time full project visibility via a new Project Activity Detail custom record, used as the single standardized dataset. These are created and maintained by a small suite of scripts and are linked-to each approved time entry and expense transaction, from which data is made visible throughout status changes. 

• New low-overhead custom Change Order records allow project managers to define revenue and cost estimates, and track their status. Meanwhile, scheduled email alerts automatically route to approvers, and a modest automation updates projects and status snapshots with respective labor and expense cost and revenue estimates.

*Image courtesy of Bonneval Sebastien